In spite of the significance of gene regulation and transcript processing in driving cellular specialization, tissue- specific expression, and morphological development, little is known concerning the relative role of these mechanisms in adaptive evolution. Although studies of global gene expression have become central to the study of human disease and health, the statistical tools available are not adequate in differentiating between adaptive changes in expression and those attributed to neutral genetic structure. Cis- and trans-regulation are two mechanisms capable of producing adaptive shifts in gene expression; the significance of each of these mechanisms in driving adaptive change is unclear. In addition, alternative splicing has been cited as a major contributor to mRNA transcript diversity, and previous work has suggested that this transcriptional diversity consists of a mixture of adaptive shifts in isoform abundance as well as a significant stochastic noise component. Due to statistical inadequacies and the subtlety of shifts in isoform abundance, the proportion of these changes conveying adaptive function is unknown and difficult to estimate. To address these issues, I propose detailed RNA-Seq examination of differential expression in Drosophila melanogaster following repeated adaptation to cold stress. Heritable phenotypic differences in cold tolerance between pairs of low- and high-altitude (and latitude) populations collected from Africa and Europe have already been identified and the range of genomic tools available for D. melanogaster make it the ideal organism to obtain high resolution measures of differential gene, allele, and isoform expression. I will generate global expression profiles from multiple developmental tissues in cold-adapted and warm-adapted flies raised in both warm and cold treatments, identifying differentially expressed loci and splicing isoforms. I will develop a novel statistical approach that accounts for neutral population structure as well as the high variance in gene expression to identify functional changes in expression. In addition, I will quantify allele-specific expression in F1 flies from crosses between cold- and warm-adapted flies, revealing shifts in allele-specific expression in both trans- regulatory backgrounds. From these allele-specific estimates, I can determine whether the adaptive shifts in expression identified in parental flies are the result of cis- or trans-regulatory changes. Also, by examining expression in both warm- and cold-adapted flies in warm (ancestral) and cold (derived) treatments, I can identify whether adaptive changes in gene expression function create novel expression patterns adaptive in the new environment, or canalize the ancestral expression pattern in the novel conditions. The proposed work can provide unparalleled power in understanding how adaptive evolution manipulates patterns of gene expression. In conjunction with whole genome sequence data, I can combine transcriptomics and population genomics to identify loci and regulatory mutations associated with adaptive changes in gene and isoform expression.